Get it Right From the Start

One of the first decisions you make when starting a new business, could also cause long-standing tax implications for your business, positive or negative. The entity form you choose for your business will impact your taxability, liability, management structure, business succession strategies and countless other business matters.

This is why a great deal of thought, objectivity and planning should go into the selection of your business entity. We can assist you with the evaluation of each entity type to determine which is the best fit for you and your company.

What are my choices?

While state law typically dictates the types of entities available for selection, as well as the liability protections offered by each, the general choices are:

  • Regular or “C” corporation
  • “S” corporation
  • Limited liability company (LLC)
  • Limited liability partnership (LLP)
  • General partnership
  • Limited partnership
  • Sole proprietorship

While most business owners see liability protection and tax reduction as the most important factors affecting entity choice, contract terms with lenders, suppliers and other parties may limit liability protection. Additionally, the selection of a business entity plays a significant role in regards to planning for the continuation of a closely held business and affects the future plans for the business. You have to consider how the choice will affect your relationship with co-owners, creditors, other contracting parties and various tax authorities.

During this initial phase of the business, you will also be faced with making other critical decisions, including the selection of the company’s overall method of accounting, its tax year-end, inventory valuation method and debt versus equity capitalization. As a licensed Certified Public Accounting firm, Apex CPAs & Consultants, Inc. can help you with all of these choices, as well as provide incorporation services by preparing your company’s Articles of Incorporation, file all applicable forms with governmental authorities and, if appropriate, elect S-Corporation status.

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